Woolworths profit to jump

Johannesburg - Retailer Woolworths Holdings has reported group sales increased 9.4% for the year ended June 26 2011, with sales in comparable stores up 6.3%.

"We expect that both earnings per share and headline earnings per share for the year will be between 20% and 30% higher than the corresponding reporting period," the group said in a trading update on Tuesday.

The group said clothing sales in South Africa increased 11.5% (9.4% in comparable stores) and food sales increased 10.7% (8.4% in comparable stores). General merchandise growth was impacted by the rationalisation of the cellular handset business in the first half of the year. Excluding this rationalisation, general merchandise grew 5.2% (5.1% in comparable stores).

SA retail space grew 7.6%, which included 22,850m2 of franchise conversions, which largely occurred towards the end of the year. Excluding these conversions, corporate space in South Africa grew 2.1%.

Sales in Australia through the group's Australian subsidiary Country Road contracted 2% as the Australian retail environment continues to struggle, with comparable sales down 10.9%. Store expansions and the continued roll out of Trenery-branded stores resulted in space growth of 9.3% in Australia.

The Woolworths financial services closing debtors' book was 4.8% up on last year. The impairment charge as a percentage of average gross receivables was 1.4 % (2009: 5.1%).

Woolworths results for the year are due to be released on or about August 25 2011.

Shares of Woolworths, which this month hit a lifetime high, are up nearly 15% so far this year, outpacing the all-share index which is lower on the year.

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